Giant FTX problems. It is the third largest cryptocurrency exchange in the world founded by Sam Bankman-Fried. The company began to wiggle when it became clear that it might not be solvent. Its competitor, Binance, “helped” this fall. It is the biggest player in the cryptocurrency market. We explain what it’s all about.
Several days ago, the most famous and oldest cryptocurrency, such as Bitcoin, was taking a dive. In just one week, the price of one BTC fell by more than 20 percent. The current price is less than 17 thousand. dollar.
It has long been known that the cryptocurrency market is very volatile, and some transactions are purely speculative. But that’s not what we’re talking about.
The price of Bitcoin hit a backlash more than a week ago, when the world’s largest exchange, the Chinese platform Binance (or rather its CoinDesk portal), published a report on the balance sheet of Alameda Research. It is a sister subsidiary of another stock exchange, namely… FTX.
According to the document, Alameda relies on the FTT token issued by FTX to secure its funds. A token is simply a cryptocurrency issued by a particular exchange.
The company did not use safe and independent assets such as the dollar. This made FTX a very dangerous environment prone to a liquidity crunch in the eyes of investors.
The “run” of the cryptocurrency has begun, that is, the frantic selling of tokens issued by the exchange founded by Bankman-Fried.
Customers want to withdraw up to $8 billion from it, and it is very likely that the money will not be there.
The price of the token on November 8 was approximately $22. In recent days, it decreased and increased slightly. Today, November 12, the price of FTT is just over $2.
The massive sale of cryptocurrencies issued by the FTX exchange has led to the fact that The company has started bankruptcy proceedings in the United States. Bankman Fried resigned as CEO and was replaced by John J. Ray III.
About 130 other related companies are involved in the procedure, including the aforementioned Alameda Research, a subsidiary of the company.
As revealed by CNBC, the company has more than 100,000. Creditors, assets and liabilities in the range of $10 billion to $50 billion. For comparison, the well-known investment bank Lehman Brothers had more than 600 billion dollars just before its collapse. This made it one of the biggest players in the United States.
It is clear that the collapse of the stock exchange affected the wealth of its creator. Sam Bankman-Fried, dubbed the “poster child of cryptocurrency success” by Reuters, was valued at more than $15 billion a few days ago by the Bloomberg Billionaire Index.
Most of his money was invested in “printed” coins on the stock exchange. Bankman Fried lost … 94 percent in one day. of his fortune which is now less than a billion dollars. This is still a huge amount of money, but the entrepreneur can no longer call himself a “billionaire”.
Interestingly, Sam Bankman-Fred was the Democrat’s second single donor. In the 2021-2022 election cycle, he pledged to donate approximately $40 million to the party.
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